Question

Problem: Complete the aging schedule for Emporia Company: Number of Days Past Due Not Yet Total Customer Due 61-90 Over 90 1-30 31-60 11,000 $ 20,000 30,000 50,000 38,000 126,000 9,000 Anders Baletto 30,000 15,000 5,000 30,000 Chong DeLong Others 38,000 6,000 92,000 15,000 13,000 $44.000 $264.000 $137.000 $29.000 $24.000 $30.000 Estimated Percentage Uncollectible Total Estimated Bad Debts 24% 50% 10% 5% 2% At December 31, 2019, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $8,000; the balance in Bad Debts Expense is $0. Instructions: 1 Journalize and post the adjusting entry for bad debts at December 31, 2019. Close the Bad Debts Expense account to the Income Summary account; then close Income Summary to Capital so Income Summary has a zero balance-closed). 2 Journalize and post to the accounts the following events and transactions in the 2020: ~March 1, DeLong's $38,000 balance originating two years prior is judged uncollectible, so write it off ~June 1, Bautista's $4,500 balance is deemed uncollectible, so write it off ~July 15, a check for $20,000 as partial payment of the $38,000 debt is received from DeLong ~November 17, you receive a check for $2,000 to settle Bautista's account; the other $2,500 will not be forthcoming December 1, Anders' $20,000 balance is deemed uncollectible ~December 1, Zeider's $8,000 balance is deemed uncollectible 3 At December 31, 2020, journalize the adjusting entry if $35,000 of A/R (aging process) may become uncollectible. Close the Bad Debts Expense account to the Income Summary account; then close Income Summary to Capital so Income Summary has a zero balance-closed). Bad Debts Expense balance, $0 Allowance for Doubtful Accounts balance, $35,000 Check figures: December 31, 2020:

Answer 1

	264000	137000	29000	24000	30000	44000
Estimated Percentage Uncollectible		2%	5%	10%	24%	50%
Total Estimated Bad Debts	35790	2740	1450	2400	7200	22000

1.

Date	General Journal	Debit	Credit
December 31, 2019	Bad debts expense ($35790 - $8000)	27790
	Allowance for doubtful accounts		27790
	(To record bad debts expense)
December 31, 2019	Income summary	27790
	Bad debts expense		27790
	(To close bad debts expense)
December 31, 2019	Owner's Capital	27790
	Income summary		27790
	(To close income summary)

2.

Date	General Journal	Debit	Credit
March 1, 2020	Allowance for doubtful accounts	38000
	Accounts receivable-DeLong		38000
	(To wrte-off uncollectible receivables)
June 1, 2020	Allowance for doubtful accounts	4500
	Accounts receivable-Bautista		4500
	(To wrte-off uncollectible receivables)
July 15, 2020	Accounts receivable-DeLong	20000
	Allowance for doubtful accounts		20000
	(To re-instate receivables)
July 15, 2020	Cash	20000
	Accounts receivable-DeLong		20000
	(To record collection on account)
November 17, 2020	Accounts receivable-Bautista	2000
	Allowance for doubtful accounts		2000
	(To re-instate receivables)
	Cash	2000
	Accounts receivable-Bautista		2000
	(To record collection on account)
December 1, 2020	Allowance for doubtful accounts	28000
	Accounts receivable-Anders		20000
	Accounts receivable-Zeider		8000
	(To wrte-off uncollectible receivables)

3.

Date	General Journal	Debit	Credit
December 31, 2020	Bad debts expense ($35000 + $12710)	47710
	Allowance for doubtful accounts		47710
	(To record bad debts expense)
December 31, 2020	Income summary	47710
	Bad debts expense		47710
	(To close bad debts expense)
December 31, 2020	Owner's Capital	47710
	Income summary		47710
	(To close income summary)

Accounts Receivable
				Balance
Date		Debit	Credit	Debit	Credit
Dec. 31. 2019				264000
Mar. 1, 2020	DeLong		38000	226000
Jun. 1, 2020	Bautista		4500	221500
Jul. 15, 2020	DeLong	20000		241500
Jul. 15, 2020	DeLong		20000	221500
Nov. 17, 2020	Bautista	2000		223500
Nov. 17, 2020	Bautista		2000	221500
Dec. 1, 2020			28000	193500
Allowance for Doubtful Accounts
				Balance
Date		Debit	Credit	Debit	Credit
Dec. 31. 2019	Balance				8000
Dec. 31. 2019	Adjustment		27790		35790
Mar. 1, 2020	DeLong	38000		2210
Jun. 1, 2020	Bautista	4500		6710
Jul. 15, 2020	DeLong		20000		13290
Nov. 17, 2020	Bautista		2000		15290
Dec. 1, 2020		28000		12710
Dec. 31. 2020	Adjustment		47710		35000
Bad Debts Expense
				Balance
Date		Debit	Credit	Debit	Credit
Dec. 31. 2019	Adjustment	27790		27790
Dec. 31. 2019	Closing entry		27790	0
Dec. 31. 2020	Adjustment	47710		47710
Dec. 31. 2020	Closing entry		47710	0